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Better Know a Fund Manager

Up this week is Bill Nygren of Oakmark.

Welcome, Fools, to part three of our several-thousand-part series, "Better Know a Fund Manager," which is loosely, but not too loosely, based on Stephen Colbert's "Better Know a District" from The Colbert Report.

Like Stephen and his thorough investigations into America's congressional districts, each week I take a look at a fund you may want to own. What's on tap this week?

Fund

Oakmark I (OAKMX)

Expense ratio

1.07%

Fund size

$5.6 billion in assets

1-year return

4.76%

5-year return

6.23%

10-year return

8.41%

Source: Oakmark.

Meet Bill NygrenThe fightin' team at Oakmark is led by Bill Nygren and Kevin Grant. It's Nygren, though, who grabs the headlines. And like most good fund managers, his tenure is impressive: Nygren joined Oakmark's parent, Harris Associates, in 1983 from Northwestern Mutual, where he was an analyst.

Of course, he can thank Grant for some of his success. Since the two paired up in 2000, Oakmark has delivered a total return of nearly 72%, trouncing the S&P 500's 8.7% loss over the same period. Now that's what I call delivering the 'zazz, baby.

But there's more to Nygren than sizzle. There's also the stake. Nygren's biggest individual holdings are the Oakmark and Oakmark Select(FUND:OAKLX) funds. That makes him as interested in the fund's performance as the average Joe Oddlot who invests alongside him and Grant.

Better still, this graduate of the University of Minnesota is a certified nerd. And by "certified" I mean "certified financial analyst," which means he's really good at math. Just try the three-question test in this recent commentary. As Nygren recently told Motley Fool Champion Funds advisor Shannon Zimmerman, "Math was always good to me." Show-off.

How he investsNygren and Grant are value investors. And that's been a costly mark to bear. Over the three years that ended in December, Oakmark I was pummeled by both S&P 500 and the Russell 1000 Value Index.

Blame Nygren and Grant. Their focus is on the titanic rather than the tiny. Among the fund's top 10 holdings are Washington Mutual(NYSE:WM), McDonald's(NYSE:MCD), and Yum! Brands(NYSE:YUM). Banking and fast food, eh? Anyone else hungry? Moving on.

With large caps -- especially so-called cheap large caps -- suffering near daily beatings, you'd think Nygren would be on the verge of selling it all and sailing to Tahiti. But that'd be giving in to Wall Street's panic-stricken stockinistas. And Nygren isn't about to do that. At least, not while plenty of moola is tied up in the funds he manages.

Is this fund for you?That means Nygren is here to stay. So should you join him in investing in Oakmark I? Shannon thinks so. Given its weighting towards large caps, this fund is sure to take off when big company stocks come back into favor.

Just know that, if you invest, Oakmark could also lag for extended periods. Indeed, Oakmark has significant investments in shakier enterprises such as Sun Microsystems(NASDAQ:SUNW) and Bristol-Myers Squibb(NYSE:BMY), neither of which has done all that well recently. But Nygren has answers for the doubters, all of which you can find in an interview featured in the July issue of Champion Funds. Ask me nicely for an all-access pass, and the issue (interview included) is yours to browse. You're welcome.

And that's this week's profile. See you back here next Thursday, fund nation. Good night.

Think you can't beat the market with funds? Think again! The selections in Shannon Zimmerman's Motley Fool Champion Funds portfolio, including Oakmark I, are up an average of 13% vs. just 5% for their comparable benchmarks. Ask us for an all-access pass to get an unfettered look at all of Shannon's picks, manager interviews, and model portfolios. Go ahead; it's free for 30 days and there's no obligation to buy.

Fool contributorTim Beyersis a regular viewer of The Colbert Report. (Stay the course.) Tim didn't have a financial interest in any of the stocks or funds mentioned in this story at the time of publication. You can find out what is in Tim's portfolio by checking his Foolprofile. The Motley Fool has an ironcladdisclosure policy.

Author

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at timbeyers.me or send email to tbeyers@fool.com. For more insights, follow Tim on Google+ and Twitter.